American Needs US Air Merger: Analyst

[FA Mikey]

I was just wondering if AA and US do end up merging. And honestly at first I persnally did not like the idea
but its beginning to look more and more like it will come to past wether I like it or not.

Take what this guy says
over the so called analysts and messsage board junkies. He knows this company inside and out. Former American Airlines CEO Robert Crandall, speaking at the American Association of Airport Executives convention in Dallas, said he expects that there will be fewer “hub” airports going forward and that low-cost carriers will continue to compete aggressively with legacy carriers.

And while Crandall admits that deregulation did not help the airline industry, he doesn’t believe that domestic carriers, including American Airlines, have to merge to survive.

On if American Airlines should merge with another carrier:“[Current American chief executive Gerard] Arpey has described the situation well...I see no reason why American should do anything.” Instead, Crandall said the company needs to focus on its joint business agreements with British Airways/Iberia and Japan Airlines.

Well with that said. I wonder how the combine airline would look like? Would JFK survive as a "mini" hub for the
combine airline? Or would AA give up on JFK and shift it all to Philadelphia? Would all the east cost bases
of the combine network survive the merger?

For argument sake AA would not abandon or shrink JFK. It is mainly an O/D station. They send 5 daily 777's to LHR plus the flights to Other European cities , along with Japan, South America, the Islands and its transcon business.

The question might be would PHL survive? AA doesnt seem to want or need a new hub operation on the east coast. Its a been there done that, and even with the resources and facilitys to go at it again they have chosen to not do it.

I was also wondering why US doesn't leave the Star alliance? I think they are a better fit for Oneworld
and then pave the road to a full merger.

It may be they were not asked or invited. Star seems willing to take in anything that has a plane, while Oneworld founding members have chosen to not let it be a free for all.

 

[ebwgs]

It may be they were not asked or invited. Star seems willing to take in anything that has a plane, while Oneworld founding members have chosen to not let it be a free for all.

Hey Mikey take this for what it's worth: As for your Oneworld "founding members" and their discriminating ways, perhaps they and you should moderate some of your AArogance and take stock of the tatters that Oneworld finds itself in right now. I don't mean to be unkind, but AA is losing money hand over fist while facing labor unrest. British Airways is in the same trick bag and Japan Airlines is in bankruptcy court trying to right it's ship. Canadian Airlines no longer exists as it was swallowed up in the last decade by Air Canada. The chaos that Oneworld is in right now is probably a temporary situation, but while it is in this condition it's probably not a good idea to pontificate about how picky your alliance is.

 

[USA320Pilot]

Mergers: The Only Answer for Network Airlines

See Story


Alaska-U.S. Airways merger: no thanks

See Story


Airline Industry Outlook (Former AA CEO Don Carty CNBC interview and discussion on AA's strategic alternatives)

See Story

Regards,

USA320Pilot

 

[IberiaMAL]

Regards,

USA320Pilot

Pardon me if I didn't notice, but all that seems like old news. Did I miss somthing?

 

[Dog Wonder]

Pardon me if I didn't notice, but all that seems like old news. Did I miss somthing?

No

 

[usa1]

This headline should read "American needs US Airways to go away "................. if AA could get her hands on US she could make it happen?

 

[Kittyhawk]

AA/US

The press is determined

 

[usa1]

CLT -vs- ATL and PHL -vs- EWR could be interesting ..... Star -vs- One

 

[tadjr]

Does anyone else see this as a possible HP/US again? 3 AA unions talking strike, rumors of bankruptcy, Doug wants a merger. Doug phones Dallas, hey guys, let someone strike and keep paying everyone else and all your bills. Hey, now you cant pay and need to enter bankruptcy. OK, now we can discharge ALL the contracts and implement what we want ( US contract prices, etc), get rid of anything unwanted in bankruptcy and then Douggie comes in and says let us buy you out of bankruptcy. No change of control for the US contracts, AA gets their contracts in line with everyone else and you have major airline # 3 courtesy of the courts. I know it sounds far fetched, but it has happened before hasnt it? Stranger things have happened and you know that the corporate minds are always trying to work a deal.

 

[usa1]

Doug likes to merger with companies while they are in BK doesn't he?

 

[usfurloughed]

Doug likes to merger with companies while they are in BK doesn't he?

Not that easy anymore. The Gov has more worker protection these days. Now "Strike" , that might be a loop hole.

 

[700UW]

The BK law changes didt change Section 1113, workers cant strike NW FAs lost their challenge to strike if there was an abrogation.

 

[FWAAA]

Does anyone else see this as a possible HP/US again? 3 AA unions talking strike, rumors of bankruptcy, Doug wants a merger. Doug phones Dallas, hey guys, let someone strike and keep paying everyone else and all your bills. Hey, now you cant pay and need to enter bankruptcy. OK, now we can discharge ALL the contracts and implement what we want ( US contract prices, etc), get rid of anything unwanted in bankruptcy and then Douggie comes in and says let us buy you out of bankruptcy. No change of control for the US contracts, AA gets their contracts in line with everyone else and you have major airline # 3 courtesy of the courts. I know it sounds far fetched, but it has happened before hasnt it? Stranger things have happened and you know that the corporate minds are always trying to work a deal.

Now that Delta pilots have obtained a raise and the UA and CO pilots will get raises, how long does anyone think the US pilots will put up with their poverty-level wages? It's not a matter of bringing AA's already-affordable wages down to US' bankruptcy-imposed slave wages, it's a matter of nearly every other airline catching up with AA's wages. And soon, every legacy pilot will earn more than US' pilots. I don't see any chance of lowering the AA pilots' wages. AA's pilots and flight attendants may agree to work more hours each month (as their schedule and average flying are lower than many other airlines) but I don't see the employees agreeing to fly for less $$$ than they have now.

 

[redheadtempe33]

Now that Delta pilots have obtained a raise and the UA and CO pilots will get raises, how long does anyone think the US pilots will put up with their poverty-level wages? It's not a matter of bringing AA's already-affordable wages down to US' bankruptcy-imposed slave wages, it's a matter of nearly every other airline catching up with AA's wages. And soon, every legacy pilot will earn more than US' pilots. I don't see any chance of lowering the AA pilots' wages. AA's pilots and flight attendants may agree to work more hours each month (as their schedule and average flying are lower than many other airlines) but I don't see the employees agreeing to fly for less $$$ than they have now.

*FLAME SUIT ON*
You are correct that US is amoung the lower paid (if not the lowest), however, "poverty-level" and "slave wages"? It is up to you to decide if you feel you are being compensated appropiately, but to make these types of statements is what turns many people against unions. I'm guessing that the lowest paid pilot at US Airways (an EMB 190 FO) makes at least $50,000 ($52 X 72 X 12 Months) a year. Certainly not a fortune, but the median income in the US in 2009 was $46,326, so to claim "poverty" making $50,000 isn't going to get many people's sympathy.

That said, I agree that AA isn't likely to get wage cuts out of their employees (short of BK). Increasing their productivity (and perhaps eliminating some benefits for new hires) is the only way to go.

 

[usa1]

That said, I agree that AA isn't likely to get wage cuts out of their employees (short of BK). Increasing their productivity (and perhaps eliminating some benefits for new hires) is the only way to go.

Increased productivity in the customer service area has only meant cutting staff to levels that eliminates any meaningful customer service ..... I guess there's more give within in-flight, more hours, same pay.